Gambling problem is no excuse for expense fraud

A former manager at a Canadian university has been found guilty of fraud, theft and forgery relating to charges that he expensed more than $38,000 of personal items to his work purchase card (P-Card) and paid his mother-in-law $139,000 in wages.

While few details of the personal expenses have been reported, information has emerged regarding the wages paid to Jeffery Lederer’s mother-in-law. During the trial it was determined that Lederer’s mother-in-law was paid more than the manager himself for a total of only seven hours of work. Many associated with the university testified that they were unaware of this work arrangement and that they had never even seen her (a near case of ghost employee).

When confronted with the charges by his supervisor at the university, Lederer claimed to have a gambling problem and felt undervalued by the university. However, during trial he admitted that he’d exaggerated the extent of his gambling issues to garner sympathy.

This case highlights the importance of closely scrutinizing P-Card expenses and ensuring that only approved contractors are on payroll. But reviewing expense submissions can be labor intensive, and P-Card fraud can take a variety of forms, including charges for:

Personal items such as gas, groceries and hotel stays

Expenses that never materialized, like airline tickets or hotel stays

Items already claimed by another employee, including mileage when employees carpooled

A recent article by StoneBridge Business Partners suggests an annual audit of a sample of employee’s expense reports as one way to safeguard against fraud, but at CaseWare Analytics, we disagree with this approach.

Sampling just a few expense reports means you may miss instances of fraud. Also, auditing on a yearly basis is more difficult than screening expense reports as they are filed. For these reasons, CaseWare Analytics offers an expense management platform that can analyze and screen expenses against company policies to ensure that they are legitimate—and that they’re not a drain on your company’s bottom line.

We also have a solution to help Concur users maximize the platform to get even more analytics, alerts and reports—and reduce the risk of fraud!

About Anu Sood

Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.